After reaching an all time high of $4.764 national average for the week of July 21, 2008, diesel fuel has dropped to $4.353, national average. Unfortunately, fuel surcharge rates applicable during August are based on a trailing average. Therefore UPS’s surcharge effective August 4, 2008 is 10.25% and FedEx’s is 10.25% as well through August 31, 2008. FedEx’s surcharge will rise to 10.50% for September and continue to hammer online vendors and retailers offering Free Shipping during the critical “back to school” selling period.
The catalog news coming out of the Brookstone Q2 conference call today, July 25, 2008 is that the company will be reducing its second half, 2008 catalog circulation by roughly 5% compared to the second half, 2007 volume. My experience has been that if you increase circulation and sales don’t go up, that’s not the result you were looking for.
Besides reduced circulation, catalog cost reductions will take the form of a decrease in weight (trim and pages) and an increase in product density (pages). Looking backward, direct marketing revenue was down 3.8% on a circulation increase of 23% for the prior 13 weeks and up 9.7% on a circulation increase of 37% for the 26 week period, both ending June 28. This, along with a lower average catalog order value, similar to the decrease in retail store AOV, and The Sharper Image going-out-of-business events, especially in malls where the two stores competed, resulted in a Q2 loss of ($8.6 million) compared to Q2 2007 loss of ($6.4 million).
The webcast can be heard by registering at
http://www.ir.brookstone.com/pages/conference.html
Which mail order catalog company was the first to include the internet as a sales channel? I don’t mean direct marketer or store front retailer to use the web; I mean pre-existing mail order cataloger to bring its catalog effort onto an internet platform. After a bit of research my best bet to is PC Mall in 1996. I am sure there are other guesses and I would love to have these added so send me your comments please.
PC Mall’s story is a classic California “founded-in-the-garage” tale. Established in 1987 by Sam and Frank Khalusi as Creative Computers, they sold Commodore’s AMIGA out of their garage by mail and then Apple computers in 1994. They added a 100 seat, 800# call center about this time. Remember the ubiquitous female customer service rep with the headset featured on every catalog cover?
The company went public in 1995 and in 1996 launched www.macmall.com and www.pcmall.com . With current sales at $1.2B, PC Mall ranks #73 in the Internet Retailer 500 and #27 in the MCM 100 for 2008. In large part PC Mall is growing ahead of the curve due to its on-going and unique re-seller relationship with Apple (iPods, iMacs, MacBook Air, Mac Pro.) And the CSR’s picture? It’s is still on the PC Mall catalog and website.
Most catalogers are knowledgeable of the FTC’s role and rules in providing guidance for direct selling, ie the “30 day” rule. In this era of “green” marketing, the FTC has now turned its attention to the many claims and mis-perceptions thrown about the landscape today by advertisers/catalogers. For instance, is your catalog really recyclable? Can you “legally” claim “sustainability” and what does the use of the three arrow symbol convey to your customers? In order to bring its guidelines into the 21st Century the FTC is holding a series of public meetings to discuss various green marketing issues.
The first of these was on January 8, 2008, and focused on he marketing of carbon offsets and renewable energy certificates (RECs). I know of few catalogers who would be interested in this topic.
However, the second session held on April 30, 2008, and focused on various claims marketers use to position their product(s) as “green” is of more direct interest and application to catalogers. The workshop agenda, transcript, and webcast can be found at: http://www.ftc.gov/bcp/workshops/packaging/index.shtml.
The goal of this session was to examine trends and new terminology used in packaging, various consumer perceptions and the need to update the FTC’s 10 year old guidelines. Transcripts of this session are available at the FTC’s Webcast Central website. For catalogers interested in knowing what the FTC provides consumers, there is a PDF version of “Sorting out Green Advertising Claims” available for download at http://www.ftc.gov/bcp/edu/pubs/consumer/general/gen02.pdf.
The FTC’s third workshop will be held on July 15, 2008, in Washington, DC, and focus on textiles, building products, and buildings.
I will summarize the findings most pertinent findings for the catalog industry and post these as they become available.
Well, I’m off to the annual catalog conference, this year in Orlando, FL. I’ll be reporting on the daily activities, what is hot and what is not, winnners and losers … and more. I will be speaking on the benefits of Social Media – should be a lively session. Stay tuned for news from the front.
E-commerce platform provider GSI Commerce Inc. http://www.gsicommerce.com/ has reported a 34% increase in first quarter revenue and reiterated its earlier projection of $1 billion in revenue in 2008, which would be a 33% increase from $750 million in 2007. Michael G. Rubin, chairman, president and CEO is quoted as saying GSI is focusing product development efforts on site search, search engine optimization, customer self-service, the customer checkout experience and site-management tools for client retailers.
GSI operates the e-commerce businesses of about 85 online retailers, and provides marketing and other services to a total of more than 200 companies.
See related post on store closings as it impacts GSI’s 85 retailers’ online business., such as Wilsons Leather .
